The ‘Gray Zone’

Peter Bransden, head of crisis management, North America, at Willis, said recent developments in the Middle East heighten and complicate political violence risk that organizations face at home and abroad.

“So long as the conflict continues and expands, organizations operating in the area will face increased vulnerability to loss,” he told Insurance Journal. “The political violence and terrorism market remains open, though we expect to see at least a short-term rating impact for exposures in and around the areas affected.”

Complication may arise if there is an expansion of acts of ‘gray zone’ aggression. These attacks often do not fit within neatly defined covered (or excluded) perils in traditional insurance policies, Bransden said. “This is again why it is so important that organizations take advantage of the breadth of coverage available, ensuring they have protection (even if sub-limited) for ‘full political violence,’ to remove any post-loss ambiguity regarding what their policy will pay for.”